• • Benchmarks will be set by the Investment Committee and will be reviewed on a monthly basis
  • Goals will be set quarterly and adjusted based on current and expected performance
  • Performance will be judged on the returns between the fund and each of following:

▪ Government Bond Fund (DBLDX): 2.83% yield and -8.88% YTD return
▪ Corporate Bond Fund (VBTLX): 2.09% yield and -2.69% YTD return
▪ Alternative Credit Fund (LMANX): 4.47% yield and 3.73% YTD return
▪ High Yield Fund (TNHIX): 4.98% yield and 1.48% YTD return
▪ Targeted Treynor ratio of 10, Sharpe Ratio of 2, and 700 basis point spread over the 10-year Note

• Management fee: a flat fee charged on the total AUM, deducted on a monthly or quarterly basis. It would be a flat annual fee ranging between 0.5% to 2% AUM + 1% over certain hurdle rate and are used to cover administrative and operating costs for the investment firm
• Performance fee: Any additional provisions, i.e., a high-water mark/ hurdle that gates the performance fee from distributing for poor performance. It’s usually 20% to ensure that the fund always has an incentive to deliver absolute rather than merely relative returns on investment
• 2-and-20: pays 2% management fee and 20% incentive fee, with or without any additional performance provisions, excluding all hurdles and high marks
• 1-or-30: Managers trade in their 1% management fee for a 30% performance fee of alpha when the latter is greater. This is for the manager to receive a predictable management fee while investor retains 70% of alpha
• Other alternative fee structures: Fund will take 2% of yield over certain amount, depending on the investment

▪ Lockup:
▪ Initial lockup period of 12 months. After, investors will be able to withdraw capital gains monthly/quarterly from any investment made
▪ After 24 months, principal can be withdrawn. Before this period ends, principal withdrawn would be subject to a penalty
▪ Principal cannot be withdrawn during an active investment, only during a period where capital is in a safe, liquid investment
▪ Liquidity:
▪ Idle capital will be put to work in safe and liquid vehicles between investments
▪ Such investments include T-Bills with maturities of 4, 8, and/or 13 weeks, or (non) negotiable CDs with maturities less than 3 month. Current yields are
between 1/2 and 3 basis points
▪ Each investment will be rolled over, if needed. If an investment opportunity arises and an agreement reached in advance, capital may not be rolled over
▪ Leverage:
▪ QG AM will seek to use leverage as it sees fit, but will proceed with caution
▪ Leverage will be utilized on a risk-adjusted basis – less than 2% and agreed to by all three members of the investment committee